Moving towards a Natural-Gas-Based Electricity System

This chapter takes the Philippines as a case to elucidate the direction and speed of electricity system transition under a vertically unbundled, competitive wholesale market model, with a focus on changes in the complementary elements of the electricity system. The study employed the analytical framework based on the grid paradigm presented in Chapter 3. The results showed that despite institutional development consistent with systems based on renewable-energy-sourced electricity (RES-E), delays in infrastructure development in high-voltage backbone and interconnection transmission grids and restrictive RES-E policy have stimulated investments in new coal power plants and deterred transitions to RES-based systems. Energy security concerns about the perceived growth of electricity demand and depletion of domestic gas fields motivated the government to use natural gas as additional generation fuel rather than balancing power. Energy oligarchs capitalised on the moratorium on new coal plants to supply ancillary services from fully depreciated coal power, investing in large-scale battery energy storage systems and gas power assets, and increasing economic gains. These factors are likely to direct the Philippines towards a natural-gas-based electricity system, combining the flexible paradigm in the RES-based system with a few clean dispatchable capacities.